Washington state is investigating whether Amazon (AMZN) abuses its powers over sellers on its e-commerce site, people involved with the inquiry have revealed to The New York Times.
According to correspondence viewed by the paper, the Washington attorney general’s office is also looking into whether Amazon makes it harder for sellers to list their products on other websites.
However, the sources added that the inquiries do not yet appear to be in advanced stages.
Similarly, California is also investigating how Amazon treats sellers in its online marketplace, people familiar with the matter told The Wall Street Journal earlier this month.
In particular, California state investigators are concerned about how Amazon sells its own products in competition with third-party sellers, one of the people said.
Indeed, an April 2020 Wall Street Journal report alleged that Amazon employees have “used data about independent sellers on the company’s platform to develop competing products, a practice at odds with the company’s stated policies.”
Although Amazon has denied these allegations, the House Judiciary Committee has called for founder Jeff Bezos to answer questions about the tech giant’s competitive practices.
“If these allegations are true, then Amazon exploited its role as the largest online marketplace in the U.S. to appropriate the sensitive commercial data of individual marketplace sellers and then used that data to compete directly with those sellers,” states a recent letter from members of the committee.
Shares in Amazon have nonetheless surged 38% year-to-date, and analysts hold a Strong Buy consensus on the stock. Out of 40 analysts covering the e-commerce giant, 37 rate the stock a buy with 2 hold ratings and 1 sell rating. Meanwhile the $2,734 average analyst price target translates into upside potential of 7%. (See Amazon stock analysis on TipRanks).
After conducting the 8th annual U.S. Online Shopping Survey, RBC Capital’s Mark Mahaney concluded that the online retail space- and Amazon especially- is the clear structural winner emerging from the COVID-19 pandemic.
Expounding on this, the five-star analyst stated, “Our survey results and industry data suggest that adoption of Online Shopping has accelerated materially, and we view Amazon, Walmart, Etsy, and eBay as beneficiaries of this secular shift.”
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